Under fiscal stabilization policy in the New Keynesian model, after a positive shock to output,
A) the government increases expenditures and the central bank increases the money supply.
B) the government increases expenditures and the central bank decreases the money supply.
C) the government decreases expenditures and the central bank increases the money supply.
D) the government decreases expenditures and the central bank decreases the money supply.
D
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The first economist to systematically analyze market failure was
A) Adam Smith. B) J. E. Meade. C) Ronald Coase. D) A. C. Pigou.
Your firm owns an old truck that is used to make local deliveries. The truck is fully depreciated and only costs $1.20 per hour to operate, but you could rent it to another firm for $15.00 per hour
What is the opportunity cost of operating this truck in your business? A) $1.20 per hour B) $15.00 per hour C) $16.20 per hour D) Less than $1.20 per hour
The “random walk” theory
A. has been widely used by stock brokers to advise clients about stock purchases. B. implies that stock prices can easily be predicted by stock analysts. C. implies that rumors, news, and other “signals” have an effect on stock prices. D. implies that a stock’s past performance is an excellent predictor of its future performance.
If the demand in a perfectly competitive market decreases, the price will:
A. temporarily increase. B. increase permanently. C. temporarily decrease. D. decrease permanently.